AWC set to scoop jackpot from Thailand’s casino legalisation

Tisco Securities indicated that Asset World Corporation (AWC), a luxury hotel and retail centre operator, stands to gain significantly from the government’s plan to legitimise casinos within entertainment complexes. This move is part of the government’s strategy to attract high-spending tourists and curb revenue losses from illicit gambling.

The government is contemplating the establishment of the first entertainment-casino complex in Hat Yai, intended to bolster tourism. Initially, only foreign visitors will be permitted entry to these facilities.

Tisco Securities’ research department highlighted that operators of luxury hotels and retail centres in the vicinity of these potential developments, such as AWC, would likely reap notable benefits. AWC has several mixed-use projects lined up for the next five years which could be suitable for the development of a casino or a luxury tourist hotspot.

In a research note, Tisco cited AWC as a recommended stock.

“The hotel operator has the potential to increase revenue per room, which is still slowly increasing, and steadily penetrate the tourism market in Thailand.”

The company’s assets are strategically located near major airports, a factor that may contribute to its success given the government’s plans, Tisco noted.

“Any casino would be established near a major airport. According to a preliminary government study, casino-type entertainment venues may be located within 100 kilometres of three major airports – Suvarnabhumi, Don Mueang, U-Tapao — or the Eastern Economic Corridor and Southern Economic Corridor.”

AWC’s three large mixed-use projects are all within these parameters. However, the recovery of the company’s Meetings, Incentives, Conventions, and Exhibitions (MICE) business has been sluggish in terms of occupancy rates.

Tisco anticipates that AWC’s plans for large-scale entertainment venues, in line with the government’s casino licensing plans, may come to fruition sooner than expected, with a shorter time required to reach the break-even point. Tisco continues to recommend a buy for AWC, with an appropriate share price of 5.80 baht.